Lean and six sigma

Six Sigma is a system mostly focused on quality. Developed for Motorola Six Sigma is said to have saved billions of dollars for them. Six Sigma concept is used to improve the quality, create a culture focused on customer requirements and measure and analyze those results using statistical tools. Most of the people describes the number of defects per million opportunities is the core discipline in Six Sigma. There is a different dimension to this concept as well. Involvement of management in the process, defining the quality and requirements from a customer’s perspective are very important in Six Sigma.

Lean manufacturing on the other hand is a system which looks at the entirety. One of the main advantages of lean may be the high quality. But quality is not the only focus of lean. It focuses on fulfilling the customer requirements effectively and efficiently. Aging lean has some similarities with Six Sigma concepts. For example management participation, customer focus are areas looked in lean manufacturing as well.

So what is lean six sigma? This is the application of six sigma concepts with lean concepts in order to achieve the favorable results of both of these techniques. Lean provides the flexibility, ways of improvement while six sigma gives very statistical measurable results especially in quality. This is the concept anyway.

As I have discussed on many of my previous posts, lean is a system based on concepts. Any other system can be used with lean as far as it does not violate the core concepts of lean. There are many success cases of lean six sigma concept. There are many failures as well. It is important not to loose the focus on main goals of lean. It is open for discussion the effect Six Sigma will bring to lean manufacturers. So if you have experiences to share leave a comment.

Sri Lanka will win the ICC Cricket World Cup

I am a cricket lover. So I thought of creating this quick post.

Congratulations Sri Lanka. You have played beautiful Cricket and YOU WILL WIN….

(Sorry My dear Australian friends)

VMI (Vendor Managed Inventory) and lean manufacturing

Lean manufacturing treats work in progress (WIP) as a waste. In fact every imperfection in the system creates the requirement to build work in progress in the system. So the WIP is also known as the mirror of wastes in the system.

On the other hand, most of the brand owners and buyers are moving towards a concept called VMI or vendor managed inventory. Basic principle of VMI is managing inventory by the vendor on the behalf of the buyer. By doing this customers can focus on their core business of selling. Most of the times buyers are prepared to pay some extra money to the vendors for managing their stocks on their behalf.

Why the vendor wants to manage an inventory? Why there is an inventory at all? First reason is the higher lead-times and large batch manufacturing of the vendors. This makes it difficult to deliver goods in small batches as an when requirement comes up. On the other hand it is also the inability of buyers to capture the requirements fasts and transmit that information down the line. This leads to managing of inventories either with the buyer as finished products or with the vendor as goods to be shipped.

Inventory in finish goods form is harder to manage. But when the inventory is managed by vendors they can manage it in other forms for an example as raw materials and as semi finish goods. Vendors will happy to have a VMI type of orders than a normal order. But the reality is in whatever form inventory is a waste. So in the ideal scenario vendors would manufacture goods as and when the buyer wants it and then will dispatch to the vendor instead of pulling goods from the inventory and sending it to the buyer.

Although VMI or vendor managed inventory have the term “managing the inventory” it does not necessarily mean that vendor should have a huge inventory. A lean manufacturer would be able to get the best advantage of this concept than a traditional manufacturer if managed carefully. Having a front end working in VMI model and the back end of the business working with lean manufacturing makes a powerful combination. Vendors order goods when they want it in small frequent batches. Manufacturers do their manufacturing when they receive the order in small batches with a very short lead-time. Isn’t this the ultimate lean manufacturing system?

Lean manufacturing and Chinese manufacturers

As you know I keep this blog dedicated for lean manufactures and lean lovers. Lean manufacturers achieve high quality on time deliveries at lower costs. They also comply with higher labor, social and environmental standards. Lean manufacturing started in Japan spread to US and European manufacturers in 1980 onwards. All the manufacturers worldwide are looking to achieve the advantages mentioned above with their lean initiatives.

But especially when it comes to the cost factor the winner is China without any doubt. I am not sure whether they follow lean principles to achieve these results. But certainly they have become very low cost manufacturers usually in the expense in other areas. They are so very low in their costs; people are willing to compromise on other areas for the price. Big brand owners are not an exception. They are making huge profits with these products. I am sure your organization is working with at least few Chinese manufacturers regardless of the industry you are in.

China trade directory one of the sites I had a look lately, suggests China has exported US$ 450 billion worth of manufactured goods to US in 2006. Interestingly it goes to show the substantial amounts of profits marketers has made with these products, which is almost US $ 850 billion according to this website (If you want to read the full story Click Here). Although I am not sure of the source of this information the reality might not be far away from this.

What do you think? Have Chinese found an alternative to lean manufacturing? You are welcome to add your comments on this.

Lean system – The thinking manufacturing system

Some people refer lean manufacturing systems by “Thinking manufacturing system”. Even Toyota in their websites has used this name to refer their manufacturing system. Why this manufacturing system became a thinking manufacturing system?

Many manufacturers and service providers create systems where systems are no-brainers and runs forever in the way it was setup initially. These systems will be changed in case of a failure or when there is a significant change to the system. People will follow the same routine day after day. They will perform their routine tasks over and over again. Obviously they will have the same result every day.

Lean systems on other hand have a significant difference to this approach. The system is designed to evolve day after day. Wastes will be identified and removed from the system continuously. Workers are always conscious and looking for the possibilities of improvement. Workers give the brain to the system and hence system becomes a thinking system.

Lean manufacturing, planning and implementation

One guaranteed way to fail in lean is rushing on lean initiatives and implementations. Lean means change and improvement. Traditionally people will want to show the results as soon as possible to their higher level managers. They will set tight timelines and work towards them and will implement new systems. But effectiveness of these changes and new methods are questionable and most of the times fail in long term.

Once the possibility to improvement is identified, it is very important to asses the opportunity and the effect of change to the organization. Then this has to be planned out and then has to be implemented. As oppose to a traditional organization that plans very quickly and tries implementing, a lean manufacturer will use almost 80% of the time of in planning the improvement and doing pilot runs. On the success they can do the implementations with minimal of efforts and to the maximum benefits in the remaining time. Pilot small scale implementations prior to the full scale implementation will give the chance of correcting the unforeseen errors without affecting the business. This reduces the chances of failures almost to zero.

This is a good lesson to anyone. Use more of your time in planning and assessing the solutions and then implement to get the best results.

Being lean with my blog

I have been posting my thoughts on lean manufacturing for sixteen months now. I have been writing about lean manufacturing and its concepts, lean thinking, lean success stories and human side of lean and so on. Meanwhile I have added links to external sites and also found some space for advertising as well.

I love lean manufacturing so much, so I thought I should re arrange my blog to make it easier to use and navigate. I wanted to reduce waste of time in navigation and scrolling. So I moved to a new blog format which you see now.

I need your feed back on this new format. If you feel there should be changes done for the layout pleas leave a comment or write to me on azabadurdeen@yahoo.com